Hoyt rented office space two years ago to Harris, receiving the first and last months' rent plus a security deposit of $1,000. In early January of this year, Harris moves and Hoyt refunds $250 of the deposit and keeps the remainder to cover $500 which is spent for repairs to the office space and one week of unpaid rent that amounts to $250. How would this information be reflected on Hoyt's tax return this year?

Question

Quizplus · Accepted Answer

Hoyt received $750 from the security deposit, which is considered income since it was used for repairs and unpaid rent. The $500 spent on repairs is deductible as an expense.

Hoyt Rented Office Space Two Years Ago to Harris, Receiving